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Ford’s love affair with EVs softens as profitability and consumer trends take focus
Update: headline updated to show Ford is still committed to EVs, just at a less intense rate.
Ford’s love affair with EVs is softening, the automaker announced today, as it shifted plans for its next few vehicles to be hybrid-electric instead of fully electric.
The move comes as profitability and consumer trends are taking focus. Ford has struggled to get its head above water in terms of making money on its EVs, scaling back its investment amount on one occasion and adjusting its strategy on another.
Consumers are also showing more interest in hybrids than pure EVs. Studies have shown that hybrid drivers are among the most satisfied on the road, as a recent survey from ACSI displayed increased satisfaction from those drivers over pure EV and gas engine owners.
Ford is taking steps to pull back from its increased focus on EVs and instead go into a new direction. “We’re committed to creating long-term value by building a competitive and profitable business,” Ford’s Vice Chair and CFO John Lawler said. “With pricing and margin compression, we’ve made the decision to adjust our product and technology roadmap and industrial footprint to meet our goal of reaching positive EBIT within the first 12 months of launch for all new models.”
How is Ford’s Strategy Changing?
Ford’s new strategy will see its next three-row SUVs utilize hybrid technologies. It also wants to adjust the speed at which electric vehicle models are released, hoping to be more aligned with customer adoption instead of keeping pace with industry leaders.
Tesla sells well, but Ford, even though it has been the number two brand in the U.S. for EVs, has not been able to keep pace. Tesla, simply put, is head and shoulders above everyone in the market when it comes to reliability, tech, and charging infrastructure. Although Ford has adopted Tesla’s North American Charging Standard (NACS) and gained access to the Supercharger Network, consumers still lean toward the Model 3 and Model Y, two vehicles that have dominated the market for the past several years.
Ford is taking a $400 million non-cash charge for the write-down of certain product-specific manufacturing assets for all previously planned all-electric SUVs. The company will no longer build these models, it said.
Focus on Commercial EVs
Ford will still be building EVs, but its entire game plan will be shifting significantly. Ford’s next-gen EVs will be built at the Ohio Assembly Plant in 2026 and will start with a commercial van.
The E-Transit will still be produced, as it is the best-selling commercial EV van in the country. It also helps business owners keep their bottom line as it has positive impacts on the total cost of ownership.
A New, Low-Cost, High Efficiency EV
Ford will bring a new mid-sized EV pickup to market in 2027 with more range, utility, and useability. It will be the first vehicle that comes as a result of the platform developed by the Ford Skunkworks team that the company established in 2022.
The platform developed by the Skunkworks team will yield more EVs in “multiple vehicle styles” and is designed to scale quickly thanks to its “minimal complexity.”
A new Electric Truck
Ford’s F-150 Lightning was the best-selling EV truck for several months, although Cybertruck overtook it in June. Ford planned to bring a new truck to market next year, labeling it the “T3.” However, this has been pushed back.
Ford will now bring the T3 pickup to market in the latter half of 2027. This will offer more features and experiences than any other Ford truck, including upgraded bi-directional charging and advanced aerodynamics. It will be built at the BlueOval City Electric Truck Center in Tennessee.
Overall, Ford’s shift in strategy is probably for the better, considering its business was quite literally hemorrhaging money. It is important that it develops and builds EVs, as many customers are still in the market for one and now prefer that powertrain to any other.
However, in the grand scheme, hybrids have taken over as the most desirable powertrain, which is pushing Ford to make this shift in the name of making money and going with what consumers want.
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Tesla analyst Gary Black of The Future Fund claims that the company is making a big mistake getting rid of the Model S and Model X. Instead, he believes another vehicle within the company’s lineup should be discontinued: the Cybertruck.
Black divested The Future Fund from all Tesla holdings last year, but he still covers the stock as an analyst as it falls in the technology and autonomy sectors, which he covers.
In a new comment on Thursday, Black said the Cybertruck should be the vehicle Tesla gets rid of due to the negatives it has drawn to the company.
The Cybertruck is also selling in an underwhelming fashion considering the production capacity Tesla has set aside for it. It’s worth noting it is still the best-selling electric pickup on the market, and it has outlasted other EV truck projects as other manufacturers are receding their efforts.
Black said:
“IMHO it’s a mistake to keep Tesla Cybertruck which has negative brand equity and sold 10,000 units last year, and discontinue S/X which have strong repeat brand loyalty and together sold 30K units and are highly profitable. Why not discontinue CT and covert S/X to be fully autonomous?”
IMHO it’s a mistake to keep $TSLA Cybertruck which has negative brand equity and sold 10,000 units last year, and discontinue S/X which have strong repeat brand loyalty and together sold 30K units and are highly profitable. Why not discontinue CT and covert S/X to be fully…
— Gary Black (@garyblack00) January 29, 2026
On Wednesday, CEO Elon Musk confirmed that Tesla planned to transition Model S and Model X production lines at the Fremont Factory to handle manufacturing efforts of the Optimus Gen 3 robot.
Musk said that it was time to wind down the S and X programs “with an honorable discharge,” also noting that the two cars are not major contributors to Tesla’s mission any longer, as its automotive division is more focused on autonomy, which will be handled by Model 3, Model Y, and Cybercab.
Tesla begins Cybertruck deliveries in a new region for the first time
The news has drawn conflicting perspectives, with many Tesla fans upset about the decision, especially as it ends the production of the largest car in the company’s lineup. Tesla’s focus is on smaller ride-sharing vehicles, especially as the vast majority of rides consist of two or fewer passengers.
The S and X do not fit in these plans.
Nevertheless, the Cybertruck fits in Tesla’s future plans. Musk said the pickup will be needed for the transportation of local goods. Musk also said Cybertruck would be transitioned to an autonomous line.
In a groundbreaking new report from Reuters, SpaceX is reportedly discussing merger possibilities with xAI ahead of the space exploration company’s plans to IPO later this year, in what would be a blockbuster move.
The outlet said it would combine rockets and Starlink satellites, as well as the X social media platform and AI project Grok under one roof. The report cites “a person briefed on the matter and two recent company filings seen by Reuters.”
Musk, nor SpaceX or xAI, have commented on the report, so, as of now, it is unconfirmed.
With that being said, the proposed merger would bring shares of xAI in exchange for shares of SpaceX. Both companies were registered in Nevada to expedite the transaction, according to the report.
On January 21, both entities were registered in Nevada. The report continues:
“One of them, a limited liability company, lists SpaceX and Bret Johnsen, the company’s chief financial officer, as managing members, while the other lists Johnsen as the company’s only officer, the filings show.”
The source also stated that some xAI executives could be given the option to receive cash in lieu of SpaceX stock. No agreement has been reached, nothing has been signed, and the timing and structure, as well as other important details, have not been finalized.
SpaceX is valued at $800 billion and is the most valuable privately held company, while xAI is valued at $230 billion as of November. SpaceX could be going public later this year, as Musk has said as recently as December that the company would offer its stock publicly.
The plans could help move along plans for large-scale data centers in space, something Musk has discussed on several occasions over the past few months.
At the World Economic Forum last week, Musk said:
“It’s a no-brainer for building solar-powered AI data centers in space, because as I mentioned, it’s also very cold in space. The net effect is that the lowest cost place to put AI will be space and that will be true within two to three years, three at the latest.”
He also said on X that “the most important thing in the next 3-4 years is data centers in space.”
If the report is true and the two companies end up coming together, it would not be the first time Musk’s companies have ended up coming together. He used Tesla stock to purchase SolarCity back in 2016. Last year, X became part of xAI in a share swap.
Tesla has announced it has hit a major milestone with Full Self-Driving subscriptions, shortly after it said it would exclusively offer the suite without the option to purchase it outright.
Tesla announced on Wednesday during its Q4 Earnings Call for 2025 that it had officially eclipsed the one million subscription mark for its Full Self-Driving suite. This represented a 38 percent increase year-over-year.
This is up from the roughly 800,000 active subscriptions it reported last year. The company has seen significant increases in FSD adoption over the past few years, as in 2021, it reported just 400,000. In 2022, it was up to 500,000 and, one year later, it had eclipsed 600,000.
NEWS: For the first time, Tesla has revealed how many people are subscribed or have purchased FSD (Supervised).
Active FSD Subscriptions:
• 2025: 1.1 million
• 2024: 800K
• 2023: 600K
• 2022: 500K
• 2021: 400K pic.twitter.com/KVtnyANWcs— Sawyer Merritt (@SawyerMerritt) January 28, 2026
In mid-January, CEO Elon Musk announced that the company would transition away from giving the option to purchase the Full Self-Driving suite outright, opting for the subscription program exclusively.
Musk said on X:
“Tesla will stop selling FSD after Feb 14. FSD will only be available as a monthly subscription thereafter.”
The move intends to streamline the Full Self-Driving purchase option, and gives Tesla more control over its revenue, and closes off the ability to buy it outright for a bargain when Musk has said its value could be close to $100,000 when it reaches full autonomy.
It also caters to Musk’s newest compensation package. One tranche requires Tesla to achieve 10 million active FSD subscriptions, and now that it has reached one million, it is already seeing some growth.
The strategy that Tesla will use to achieve this lofty goal is still under wraps. The most ideal solution would be to offer a less expensive version of the suite, which is not likely considering the company is increasing its capabilities, and it is becoming more robust.
Tesla is shifting FSD to a subscription-only model, confirms Elon Musk
Currently, Tesla’s FSD subscription price is $99 per month, but Musk said this price will increase, which seems counterintuitive to its goal of increasing the take rate. With that being said, it will be interesting to see what Tesla does to navigate growth while offering a robust FSD suite.
Tesla analyst claims another vehicle, not Model S and X, should be discontinued
SpaceX reportedly discussing merger with xAI ahead of blockbuster IPO
